BIRMINGHAM, Ala. (DTN) -- A father-son operation in Logan County, Illinois, contacted John Kirkpatrick last year in search of an investment buyer for their 1,167-acre farm. They had built the farm up and wanted to continue to rent the ground. It's a common arrangement these days, reported the executive vice president of Murray Wise Associates, based at Champaign, Illinois.

"They needed to free up some capital and eliminate debt heading into what I'd call more challenging financial times as relates to income for ag. Specifically, they were looking at declining commodity prices and escalating input costs," Kirkpatrick said. His business today is 96% linking investor capital with on-farm operators.

"Many sellers are looking for an investor that can be an equity partner. A lender, on the other hand, is a debt partner," he said.

The Logan County farm was mostly clay loam and silt loam soils, and sold to an investor for $11 million, or about $9,426 per acre. This was above the $7,350-per-acre average for cropland in Illinois this year. Kirkpatrick said the land was above average in quality, in the top 25% for the state, and tile-drained.

Leaseback sales are growing in popularity, but they bring their own set of challenges and opportunities. "If you are trying to sell property for a leaseback arrangement, you are asking a buyer to make some sacrifices," Kirkpatrick explained. "Typically, a buyer paying top dollar for property wants total control. For that reason, I tell sellers in this situation they have to have some flexibility on price or lease terms to make it attractive for a buyer to do business with them."

Investors are looking for land in the top one-third on quality, he said. In addition, the property needs to have clearly defined rectangular or square boundaries. Good drainage, property outlets and farming communities with local wealth and intergenerational operators are all highly desirable.

Kirkpatrick added, "Investors also want a nearby market for grain, and they want an area with good pricing for delivery. They look at soils and weather patterns. Some places have more resilient soils and more consistent weather. The right combination leads to better yields and better cash rents. Ultimately, it gives an investor that top resale price and premium rents."

Looking ahead, he's seeing a "transaction gap" in the Midwest land market. Closing that gap will be tough. "Corn and soybean prices are at the same level they were in 2010, and rents have gone back down to about $270 per acre this year for quality ground," Kirkpatrick said. "Despite this, most sellers still want $9,000 to $9,400 per acre. Most buyers are thinking $8,500. That's a pretty wide gap between what the seller wants and what the buyer will tolerate."

He added the seller mentality right now is that if they can't get their price, they won't sell.

"In a 60-day period [August, September], I saw 12 offers made on land for sale, and only two were accepted," he reported. "The ones accepted were in the $8,600 range. That tells you where buyers' minds are. This market is trying to find itself based on rents and commodity prices."